Archive for Culture

Let’s Get Stuffed

JD over at  sparked a little controversy with the we-are-Number-One-crowd last week when he posted this chapter from the Story of Stuff.  The offence taken certainly indicates how screwed up this whole consumer thing has gotten.  For one thing, we are all tied into the process through our economics (social capitalism) and our economy (the free market) and our politics (based in a fear of communism) and our religion (the failure to recogize the atheist in all of us).  So any discussion of this kind leads almost inevitably to arguements and anger and dismissal of the original idea which was that we all have too much stuff.

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Cars and Trucks

Sophistication has its limits even in the US of A.  Apparently so does Hudibras.  So the news last week from GM was as much surprising as it was long over do:
GM announced plans at its annual stockholders meeting today for new company strategies designed to “aggressively respond” to this increasing demand for fuel-efficient cars that the North American consumer can afford. The company will be focusing on a series of efforts aimed at cutting costs, eliminating jobs, and limiting its dependency on truck and SUV sales.

Unfortunately, the good comes with some bad. Since it is always about profit, and not very often the workers, nothing in the announcement mentions plans for reeducation, or transitional support for the unemployed thousands as four plants will close by 2010.

Investors cheered the decision, sending the company’s stock up about 2 percent in early trading.

What makes this news a Loser is that this decision smacks of not being about what is right and sustainable for the economy but what self-serves the interests of Wall Street and by extention we the stock holders.  Because no matter how you cut it, we are caught up in a web of our own making.  We have to consume, we need to make money, we are invested in the very corporations that we know have only self interest at heart.

Contrast that to this kind of story of a Winner from Alex at YBwhoUR?  It’s about an inventor named Matt Shumaker and his motor bike.  It’s an example of what each and every company should be using as a reason for being.  What do people need not what can we sell them. 

I think that a long time ago that was the way it must have been.  Then came the Mad Men, and the idea that the business of business was making money first and useful products second or even third.  Excessiveness meant success.  The more you made the more you could sell became the business model.  And it worked in two ways.  One, to show that we are a successful and abundant country where everyone has a chance to have more and more stuff.  Two, to set up a way of producing things that explained why we needed to be powerful enough militarily to enforce ourselves upon the rest of the world when the need arose. 

So now, even as we look at the younger generation as the ones who will have to solve this problem, we may be facing, are facing the possibility, that all the excess is about to come back and overwhelm us.  Unless, of course, GM is not too late and then, well, . . . ?

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Weekly Tags, # 7

On one of the blogs I frequent for the discussions the talk of late has been about the power less ness of the blogoshpere.  Or rather the way the blogosphere can sap the energy from acting by just blogging about acting.  One meme that appeared was the apparent lack of cross cultural exchange, ie., that everything we see (I see) comes to us through a westernized point of view.  So like a born-rich person really can’t say that they understand poverty, we can’t really say we understand what the rest of the world is really going through.  It is a point of view that is hard to deny but doesn’t seem right nevertheless.  Take for example, this blog I found on Memorial Day.  Trace back the links from the commenters and you should see what I mean.

Right now I am listening to UBUWEB.  Kenneth Goldsmith taking me through a collection of sounds and thoughts from the years 1983 to 1993.  I may not be getting cross cultural but I am crossing time cultures.

It is enough to split your personality which may be what is going on here at the SchizoFrenetic site.  With a point of view on the marketplace but quite definitely aware of the political arena too, our careerist Zak gives me quite a bit of cross culturality too.

But this site represents my week travels best I think because the week included T and I heading up to West Hollywood to listen to Nicola Griffith and Kelley Eskridge read from their writings.  Walking the streets with people of the same sex and comfortable in themselves with themselves has to be as cross cultural as you can get in this country that still has some doubts about who we all are.

My final mention for this week is TED talks.  I was pointed to it after beginning to read Jill Bolte Taylor’s My Stroke of Insight.  Technology, Entertainment, Design is a site that disproves the point of view that the internet doesn’t represent action by doing what it is about.  Grown out of a 1984 conference in Long Beach it now sponsors international array of speakers at the annual and sold out meeting.

The annual conference now brings together the world’s most fascinating thinkers and doers, who are challenged to give the talk of their lives (in 18 minutes).

This site makes the best talks and performances from TED available to the public, for free. More than 200 talks from our archive are now available, with more added each week. These videos are released under a Creative Commons license, so they can be freely shared and reposted.

In addition, TEDGlobal sponsors world wide activities, and the TED Prize offers $100,000 each to three conferees to a wish to “change the world.” 

Blogging may seem like a static exercise from where one can yell, laugh, cry, and piss and moan from the silence of your lonely room but as I hope you can see from the journeys above that ain’t the half of it.

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Our Gift from China

It is hard to buy a manufactured product these days that doesn’t come from China or some other sweat shop nation.  But that doesn’t mean much when you are out shopping.  Normally we buy what we need and take the product at face value.  News stories of product defects, of tainted materials used in the manufacturing process, are usually sloughed off by the everyday ordinariness of life.  That’s why it took me by surprise when the reality of the danger struck home.

Here’s the situation:  T and I had started working out in the pool by swimming laps using kick boards.  The weather had turned warm early and we both needed to get back in shape after a winter of stress and strain.  I had noticed though that T likes to float around in the pool after a workout while I get out to enjoy the sun.  So I went back to the store where we got the kick boards and picked up small size belly board that was small enough for pool use but large enough for her to float on.  So much for good intentions.  What’s that saying “No good deed goes unpunished.” 

Skip forward about two days.  T says “Look at this.”  She is pointing to a small row of pimples on her right side.  “And this.”  She turns so I can see a similar breakout across her chest.  I can tell from the way she is looking that she thinks this is more of the same weirdness that has happened to her body since the gall bladder surgery in February.  In another two days the breakout has spread to the backs of her knees and all across her abdomen.  “I don’t understand what could be causing this.” she tells me.  “I stopped using any medications over a week ago.”  So we go back to the doctor, who prescribes a steroid ointment, and then, either Benadryl or Zyrtec, whichever works since he really doesn’t know what the cause is but sees it as some sort of allergic reaction.

Meanwhile, I am still trying to figure out what could have caused this to happen.  Could it be more post surgery body stress?  Was it the sunshine, the pool water, the combination of both?  It didn’t make sense.  Then I looked at the belly board I bought for her to float on.  China, tainted lead-based paint, asbestos, flash across my mind and I suddenly realize that the pattern of the breakout actually matched the way she would lay on the board as she floated in the pool.  Shit.

“There are generally three types of product liability cases: negligence, strict liability and breach of warranty” say the folks at

Strict Product Liability

If you can prove that a product is “unreasonably dangerous” – that it has a design or manufacturing defect – then you may be able to establish that the defendant is “strictly liable.” Unlike negligence cases, you may not have to prove the manufacturer knew about the danger, because even if they didn’t, they should have. (One of the main purposes of this provision is to hold manufacturers accountable for developing safe products). You still, however, have to prove that the product caused your damages.

Is this the case?  How can I even start to prove it?  Yes, the board was made in China, but how do I pursue a product liability case with so many other factors involved?  Maybe it wasn’t even mis-manufactured but just made with latex in the processing.  She is allergic to that.   The site recommends talking to several lawyers, and warns that the whole process of pursuing a claim will be extremely expensive.

No, for now I’m stuck with this.  Blogging about it in hopes that the blogosphere might have a response.  I’m also going to take this question over to JD’s getrichslowly forum and see what the folks there might suggest.

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New bet, the same old tax?

But first, that was just too easy.  Lakers over Spurs and the starters rest for most of the fourth quarter.  Hmmm.  Seems similar to the Spurs in New Orleans.  I’m just saying.

Anyway, perusing the LA Times OpEd page on Friday and came across this item about how the state and the gov think that the best solution to the current budget problem is to float a bond issue against future lotto revenues.  Here are a few factoids from the opinion:

  • a 1999 national study conducted by Duke University concluded that families making less than $25,000 a year spent roughly $1080 on lottery tickets.  10% of their income.
  • Families earning between $50,000 and $100,000 spent only $495.  1% of their income.
  • The state of California spent over $93 million the last three years in advertising the lotto.

As the writer, Michelle Steel – BOE member for the 3rd District, points out, “the governor’s plan to pay for the state’s irresponsible spending rests, ironically, on getting Californians to spend more irresponsibly.”   I really do love it when things get ironic.

Remember last summer when everyone in the personal finance blogs, well maybe not everyone, was posting about how to save on fuel while driving?  Drive slower, plan your trips so that you do more on each one, carpool, use public transportation, and go ahead, ride a bike to work.  Remember.  Well, one of the tips I remember had to do with going to the pump early in the morning or late in the evening because the day’s heat affects the gas by expanding it.  You get less gas more hot air in the middle of the day.  Well, yesterday it was reported that “a survey shows that Californians could be overpaying as much as $3.4 million a day as heat makes gas expand.”  More irony.  You moved to California for the hot weather only to find that the automobile state is costing more to live in because of it.

And then there is this.  A long time ago I read a novel by Calder Willingham called Eternal Fire.  It was a fine trashy, sexy novel about a sociopath and his love life in the New South.  Yes, I read it mostly for the sexy, trashy part.  But there is a section the story that chronicles how a court trial is rigged so that an innocent person is besmirched.  The scripted actions of the community leaders and the judge has always stuck in my mind and is frequently brought to the fore when I read things like the headline story about the Congress defying Bush by passing the Farm Subsidy Bill or the Military Spending Act.  Who are they kidding?  Bush who has favored these programs all through his two terms now gets to act all righteous while the bills still get passed and the Congress now run by the Dems gets to seem defiant.  Wow! What a script.  The bills still get passed though.  $630 billion for defense, $10 billion for not growing crops.  What’s ironic is that our media actually purports to be covering the real story.  Hah!

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Weekly Tags

I travelled outside the box this week.  A little art, some pop psychology, a couple of chart makers, and a self help guru that comes off sounding like a freak.  But it was, as usual, elucidating to say the least.

This first one puzzled me no end.  I couldn’t find an about page but it appears to be a blog about the egocentric meanderings in the lesbian life of its author (ess) and how it is connected to Jane Austen except through a life lived separate but equal I can only guess.  The pictures and attitudes are great though.  Invigorating. 

 Second on my week’s list is this rather odd and disbelievable blog that purports to be by being the port of disinformation.  A tool from what little I understand about the term of those of the political persuasion who want to confuse you with the wrong facts at the right time.  Gee, sounds perfect for our times.  Alls I know is there seem to be plenty of variations on the theme.

 Excited is the word for this third find.  Excited to find a mind that creates through pictures and words.  Excited to find another poet and one who uses the web exclusively.  Excited to think that maybe this time through this link I’ll find others who want to explore thinking through pictures and words.

Last, but not least, on this week’s list is this aforementioned weirdo.  Steve Pavlina is his name and I happened upon his blog by tracing a link at the Millionaire Mommy Next Door blog.  Direct to the point of being rude but certainly unafraid to say what he thinks, that’s how I’d characterize him.  Still, in the words of T, he’s a weirdo.

And that’s it folks, the week that was.

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Financial Advice, pt. 7

Attacking the rich, maligning the poor, driving a wedge into the widening gap between the top and the bottom of the workforce, these are the topics of concern in The Trillion Dollar Meltdown’s penultimate chapter.

Chapter Seven: Winners and Losers

It is perhaps apt that this next to last chapter has this title since we have become a nation that lives and dies with the sports metaphor.  But just as the sports’ news has been dominated by spectacular betrayals of trust and honor so to has the world of finance.  Superstars, yes.  Superheroes, no.  What has become clear to the outside observer is that the last forty years have led us to a point where the idolization of the rich, and unfortunately their methods, is the major characteristic of our psychology.  Winning at any cost, walking away with it all, that is what we idolize.  We are number one in our admiration and acceptance of the rich and their apparent right to have it all.

So what if Blackstone guts Travelport of $4 billion while laying off 841workers.  We cheer as,

The private equity kings insist that they are management wizards, not financial engineers.  But, at least in its most recent phase, the numbers show that the private equity game, like subprime CDOs, is just another arbitrage on cheap money and rising asset markets. 

Billion dollar dividends to opportunistic takeover artists are just one wavelet in a long-term, and for many, increasingly dusturbing, tidal shift in American society – a widening disparity of wealth and income not seen since the Gilded Age.

Consider these wins:

  • “the top 1percent, or the top centile, who doubled their share of national cash income from 9 percent to 19 percent.
  • “the top one-hundreth of 1 percent, of fewer that 15,000 taxpayers, quadrupled their share to 3.6 percent of all taxable income.
  • “the average tax return, of those 15,000, reported $26 million of income in 2005, while the take for the entire group was $384 billion.

Seems fair to most conservatives apparently because they still claim that the poor through the government’s entitlement programs, and the middle class through tax-deferred savings, and the elderly’s social security and other retirement plans got more.  Only here are the facts of the matter according to Morris:

According to a 1999 Treasury study, 43 percent of the tax benefits from retirement savings programs went to the top tenth of households.  66 percent to the top fifth. and only 12 percent to the lower three-fifths.

Whiners and winners, that’s the net analysis.  Didn’t finish school, did your job get automated?  Well, that’s your lower class for you.  Didn’t understand that subprime mortgage contract, well that’s too bad, isn’t it?

There is no conspiracy against the poor and the middle class.  It’s more the inevitable outcome of our current money-driven political system combined with “the disposition to admire, and almost worship, the rich and the powerful,” which Adam Smith fingered as :”the great and most universal cause of corruption of our moral sentiments.”

Meanwhile, consider the drive to privatize.  Sallie Mae is an example.  Designed to be a government program to assist students in furthering their education has instead become a private company that  “was fully privatized in 2004, a year in which it made an astonishing 37 percent after-tax profit.”  See, say the free marketeers, that’s what business is all about.  When the government ran it, it just helped thousands of student learn their way to success.  But when it became a private company, and still retained the aspects of governmental protection from state usury laws, it made money.  As a matter of fact, it even spun off a separate SLM business line that racked up $800 million in debt management fees in 2005.  Imagine that.  The rich, CEO Albert Lord’s compensation package in 2003 was 12.7 million with options by 2005 up to 189 million, get richer.  While the poor (students) and the middle class (their parents) incomes stay flat.

We are apparently developing three kinds of services in this country.  The service industries that provide jobs for the lower class, the government and industry service which provides jobs for the middle class, and the financial services which provides wealth and leisure and privilege for the upper class.  Need proof, just look at Countrywide or Bear Stearns or Cit group or the K Street Project.  When they make money they are private and successful models for how to work the free market.  When they fail, the government, through the Fed or through pressure of other lenders/banks, bails them out.  Socialized capitalism is what we have.

The great consolidations of banking and investment banking into financial mega-players has proliferated armies of mega-income executives  Besides driving cash income shares toward the top of the payroll pyramid, it has greatly enhanced the political clout of Wall Street – as evidenced by steady cuts in taxes on capital gains and dividends and the persisitence of absurd tax advantages for private equity funds.

 It takes a certain kind of confidence, some would say faith, to believe that we can come out of this cycle with our overall system still intact.  Reading about the power of these forces and having watched what has happened even though the Democrats have assumed the political power for now, does not argue for success.  Those armies of execs, those walls of money strategies, those free market confidence games are not just going to go away.  America, you and I on the bottom may just have to do something about the top.

Next up:  Chapter Eight: Recovering the Balance

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Financial Advice, pt. 4

So far this week we have been dealing with the past, the history we should have learned from.  But as Morris keeps letting us see, Hudibras, was and probably still is, the god in charge.

Chapter Four: A Wall of Money

The oughts, as the English call them, have been tumultuous at best.  The bust, the Tower’s attack, Bush, Iraq; a list of ups and downs that just doesn’t stop.  The Fed, led by Alan Greenspan, responded to this in a way we should all recognize.  Starting with the bust, the Fed began to lower the federal fund rate.

The Fed did not start raising rates again until mid-2004, and for thiry-one consecutive months, the base inflation-adjusted shor-term interest rate was negative.  For bankers, in other words, money was free.

. . . banks embraced securitization.  Instead of holding their commercial mortgages, corporate loans, high-yield takeover loans, emerging market loans,and such on their books, the bankers had always done, they began to package them up as collateralized loan obligations (CLOs) or collateralized debt obligations (CDOs) and sell them to outside investors.  They could still collect hefty fees while encumbering little is any of their capital.  Lending, in other words, was becoming costless.

CMO, CLO, CDO, RMBS, CMBS, ABS, CBO, SBE; these are just some of the names of the securitized instruments that came into being.  Take a look at this list from,


An investment instrument, other than an insurance policy or fixed
annuity, issued by a corporation, government, or other organization
which offers evidence of debt or equity. The official definition,
from the Securities Exchange Act of 1934, is: “Any note, stock,
treasury stock, bond, debenture, certificate of interest or
participation in any profit-sharing agreement or in any oil, gas,
or other mineral royalty or lease, any collateral trust certificate,
preorganization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of
deposit, for a security, any put, call, straddle, option, or
privilege on any security, certificate of deposit, or group or index
of securities (including any interest therein or based on the value
thereof), or any put, call, straddle, option, or privilege entered
into on a national securities exchange relating to foreign currency,
or in general, any instrument commonly known as a ‘security’; or any
certificate of interest or participation in, temporary or interim
certificate for, receipt for, or warrant or right to subscribe to
or purchase, any of the foregoing; but shall not include currency
or any note, draft, bill of exchange, or banker’s acceptance which
has a maturity at the time of issuance of not exceeding nine months,
exclusive of days of grace, or any renewal thereof the maturity of
which is likewise limited.”

Property which is pledged as collateral for a loan.

Remember Black-Scholes?  Now instead of investors using the formulas, we apparently had our trustworthy bankers playing the same game.  All with Greenspan’s “a new paradigm of active credit management.” Put’s blessing and the Fed’s help.  Leverage buyouts were back.  OPM, Other People’s Money, became the watchword for how to invest.  Morris uses this example,

Put up $1 billion, borrow $4 billion more, snap up a healthy company for $5 billion (after making a very rich deal with its executives), vote yourselves a “special dividend” of $1 billion, then as the buyout-fueled stock market keeps rising, sell the company back to the public, pocketing another couple billion, all the while taking no risk.

As I write, I can’t help thinking of the Bear Stearn buyout.  About how much we, you and I John Q. Public, don’t know about how all this works nor how we can do anything about it in a time where, to judge from the workshops being offered around the country, many people are still being sold on the idea that this is the way to get rich.  As we all sit here watching the real estate bubble burst, I won’t take the time to catalog all the stats for you.  Just know this, during the same time that LBOs were making a comeback, our economy was being fueled by the same sort of leverage being applied to home ownership.  While, Greenspan focused his put on stabilizing the financiers while encouraging the rest of us to go further and further into debt via the refi route, real real estate values were inflating at a rate of about 50 percent.

Refis jumped from $14 billion in 1995 to nearly a quarter of a trillion by 2005, the great majority of them resulting in higher loan amounts.

By 2005, 40 percent of all home purchases were either for investment or as second homes. (Experts believe that a large share of the “second homes” actually are speculations for resale; lenders don’t review vacation-home purchases as closely as investment properties.)

OPM.  Free market.  Caveat Emptor. 

By 2003 or so, mortage lenders were running out of people they could plausibly lend to.  Instead of curtailing lending, they spread their nets to vacuum up prospects with little hope of repaying them.  Subprime lending jumped from an annual volume of $145 billion in 2001 to $625 billion in 2005, more than 20 percent of total issuances.

The industry was awash in socalled “ninja loans – no income, no job, no assets.”

Meanwhile, things were, without us having any way of knowing it, becoming more and more insecure in the securitized world.  Remember all those security instruments mentioned above, well since there was so much money to be made at so little risk (ha ha), and with so little regulation, then why not just do this.  Think I’m talking small here.  Well, think again.  According to Morris, “The notational value of credit default swaps – that is, the size of portfolios covered by credit default agreements – grew from $1 trillion in 2001 to $45 trillion by mid-2007.  Synthetic (models emulating the real CDO created on a computer to simulate the real thing) SIV structures were now capable of being built and then put into play.  Unbelievably, entities that were called CDO2s or CDOs of CDOs, you get the picture.

Earlier in the book, Morris explained one of the guidelines that financial institutions were supposed to use to make sure that the investor was covered against loss was something called the Agency rule.  Under the Agency rule an institution’s officers could not recommend investments that acted against the investor’s interest.  But without regulation, remember Hedge funds are private, who’s to say what is in who’s favor, especially as the swaps make the distance between the real investor and his or her money increase exponentially.

Next up, Chapter Five:  A Tsunami of Dollars

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The customer is the one in front of you

So I am sitting outside at a small white plastic picnic table.  T is inside delivering a banana box of strawberries and bananas to the store owners.  Sunshine turns my legs warm and the cool of the umbrella shade sets the tone.  I am reading the sport’s page, lakers in four!, and waiting while T barters us smoothies for breakfast.  Cars pull into parking lot in front, the click clack of someone walking down the sidewalk from the hair salon next store, the murmur of conversations, hello echoes, and then I realize that I have finished my paper, 25 minutes have passed and no breakfast smoothie of mango and ahsighee sits in front of me.

Without thinking very much, I find myself dropping the paper onto the table and striding off through the parking lot towards my favorite bagel shop across the street.  Later, as T and I walk back up the hill towards our place, I find myself trying to explain what I felt about what had happened.

The customer is the one in front of you.  The one who placed an order and is waiting while you . . . well, while they apparently did everything else but finish your order.  One of them got interrupted by family phone call.  The other decided to finish making the tuna salad for the lunch crowd while she talked to you and the other customers who wandered in and actually ended up getting their orders filled first.  ‘Cause when the cashier got off the phone, he began taking their orders and assumed that his partner was taking care of you.”

“They’ll never make it big,” says T.  She says it although since she started advising them on their business three months ago, the business has quadrupled its sales.  This month they have already reached their contracted limit for credit card sales ($5,000) with a week to go before the end of the month and they’re happy to pay the small penalty.

Mom and pop versus McDonalds, that is the nut of it.  Small businesses don’t have the benefit of a book of procedures that tell you exactly how to upsell the customer.  At any MacD, the cashier takes your order, your money, and by the time that’s done, almost, the finished product is waiting at the pickup point. Everyone on the staff has an assigned set of tasks designed to get you in, get your money, and get you out.  As a society, we have gone in my life time from drive ins to drive throughs.  Grocery stores rush up extra cashiers when the line is more than three.”

T gives me that look she saves for when I’ve gotten up on my soap box and she wishes I could just hear myself.   So I don’t have to say any more, she knows my drill.  We have owned small businesses like that one together for several years.  She also knows that most of the time I am totally anti-fast food from plastic flavored foods to upsizing the drinks.  (Have you noticed the new ads for “extra chicken” that they are trying to slip through under the guise of going “green”?)  So she is probably secretly amused at my upsettedness.  But hey, I am a breakfast person and waiting 25 minutes well that just doesn’t wash.

The thing is that I really do support the idea of thinking global while buying local.  T and I, we live the talk.  We walk to the grocery, we barter with our local merchants, we both ride bicycles, we stack our vehicle trips and use the library for the majority of our reading materials and studies.  Taking time to take the time is our motto but still we don’t live outside of our culture we live in it.  Even in an uncrowded store, when you get to the purchase point, you can feel the breath of the next customer on your neck.  And so we aren’t immune to the constant pressure unless we develop habits for dealing with it.  Relearn the ideas of breathing deeply, and enjoying the warmth of the sun on our backs.  And as Frankie used to sing,

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Bonds, Mr. Bond?

Shaken not stirred, isn’t that the way you like them, James?  Ah well, then I suppose you’d best start here.  I know, all that financial terminology and who can really trust Wikipedia?  But what are we to do, trust the trading firm who wants us to buy into the bond market with them?  No, you are right, James, we need to prepare ourselves for this adventure into the vast world of credit.

A bond is a so-called debt security.  The issuer gaurantees that you will be repaid your principal plus interest at maturity.  Unless, of course, the issuer goes bankrupt in which case you get in line like all the other lenders.

There is no guarantee of how much money will remain to repay bondholders. As an example, after an accounting scandal and a Chapter 11 bankruptcy at the giant telecommunications company Worldcom, in 2004 its bondholders ended up being paid 35.7 cents on the dollar. In a bankruptcy involving reorganization or recapitalization, as opposed to liquidation, bondholders may end up having the value of their bonds reduced, often through an exchange for a smaller number of newly issued bonds.

Oh, I realize, James, that you have no fear that you will get your money.  After all, you do have your ways.  Meanwhile, with interest rates at the Fed hovering at zero and the stock market fluttering and fluctuating minute by minute, bonds do seem the way to go.  Still . . .

At, reporter Katie Brenner gives us this estimate:

(Fortune Magazine) — You count on bonds to be the quiet part of your portfolio, providing steady returns and offsetting the volatility of your stock holdings. Many retired investors count on bonds for regular income. Lately, though, the bond market has been anything but calm. The subprime-mortgage meltdown has roiled the credit markets and slowed the economy. In response, the Federal Reserve has cut short-term interest rates, helping to push yields to near-historic lows.

And James, please don’t forget about the inflation factor.  With the Fed rate going low and prices on the rise, you may need to pull out your trusty submarine to survive the tide.

‘Til tomorrow, then.


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